Investors & landlords

You may consider a tax professional this year.

 

You had a profit of $125,000; it sounds like you are saying you had roughly $25,000 of purchase/selling expenses for a profit of $100,000.

 

Rough numbers:  You owned the home 12.5 years.  As Mike said, the 9 years of the first rental period is "Nonqualified Use", so that means you can't exclude 9/12.5ths (72%) of $100,000.  The other 3.5/12.5ths (28%) can be excluded.  In other words, you'll have roughly $72,000 of taxable profit, taxed at the long-term capital gain rate (usually 15%, plus state).

 

I agree with Mike that you may want to double check that $30,000 is the correct depreciation.  It certainly is possible in some areas, but overall that seems unusual.  That amount is taxed at your ordinary tax bracket, up to 25%.  The sale of your house will show $130,000 of gain ($100,000 of profit, plus $30,000 of gain due to the depreciation).

 

Did you have passive loss carryovers, or did you have profit or were the losses able to be used?  Look at your 2020 return to see if you had unallowed passive losses that year.  You MIGHT have had some carryover losses that you forgot to enter when you re-started the rental in 2023.  Or you might not have had carryover losses (you may have had profit or the losses may have been able to be used).

 

TurboTax automatically applies NIIT.  Both your personal residence and the rental would be subject to NIIT, so there is no need to adjust things for dates, etc.  But if your income is high enough to be subject to NIIT, I really, really suggest a tax professional this year.